The majority of inventory in today's stores are carried in gondola constructions. Gondola merchandising has changed little over the years. Generally there is a floor platform with a vertical upright pegboard. On the borders of the gondolas there are vertical weight-supporting uprights having a plurality of vertically aligned slots. The uprights via the vertical slots carry shelving and other inserts in or on which merchandise is placed. The pegboard carries some weight but it is minor in comparison to that carried by the uprights.
There is a constant demand on behalf of the self-service food and non-food packaged goods industry for retailers to increase their efficiency. Added to this are the ever-expanding lines of products designed to attract more consumers, and which constantly fight for greater shelf space. This has all resulted in a greater segmentation of sales per individual retail unit of product, or SKU.
Since some products sell better than others, there is a tendency to under-inventory fast moving products, which results in costly, shorter reorder cycles to maintain proper inventory. There is not enough gondola space available to keep top inventory items in open stock. The space has to be frequently serviced. At the same time slower moving items tend to stay on the shelves longer and occupy more space considering their contribution to revenues. All this activity has resulted in an extremely inefficient environment, both from labor, warehousing, and inventory management perspectives. A good example of a category that suffers from these problems is the pet food category, particularly dry bags of dog and cat food, as well as cat litter bags. The bags not only require a large cubic space, but these are bulky, making them awkward to display.
The current gondola merchandising system is outdated in its ability to inventory or display products in volume that match their turns. Accordingly, key sellers in the category tend to be depleted while slow sellers tend to be overinventoried. The current "solution" necessitates frequent ordering and stocking of fast moving stock keeping units and overinventorying of slow ones-- a very costly solution. A 200% increase in financing is required to carry double the amount of inventory.
As a result there is need to replan or replanogram gondola shelves. This should result in creating uniform volumes or stacking heights per SKU thereby controlling uniform inventory per SKU regardless of the product movement. While it is possible to compensate for key sellers by providing more selling volume (multiple facings), in reality, most stores are not large enough to accept a vast number of multiple facings of fast movers to, in effect, balance out the whole product category. The ideal solution, therefore, would be to balance the height of the inventory stack, fostering more uniform stocking. This in turn suggests using smaller shelves. At the extreme, literally, one shelf per SKU is possible.
Most gondolas are made in a standard 48" width. For the proposed system to be successful, shelving must be effectively supported by the gondolas without considering the 48" limitations. In other words, regardless of the gondola width, the shelves have to be segmented down to the individual width of the product so that, in fact, each cluster of product in inventory can be planogrammed to the exact physical size and product needed to meet the sales demand. Therefore, a shelf may be less than, equal to, or more than 48"